Exhibit 1 Balance Sheet Eva Spade

Current Assets	$5625
Fixed Assets	$5625
Total Asset	$11250
Current Liabilities	$1500
Long-Term Debt	$2250
Common Stock ($2 par value)	$1500
Retained Earnings	$6000
Total Liability and Equity	$11250

Exhibit 2 Revenue and Earnings Eva Spade

Year	Sales	Net Income	EPS
1994	7,500,000	900,000	1.20
1995	10,312,500	1,267,500	1.69
1996	12,000,000	1,440,000	1.92
1997	18,750,000	2,156,250	2.88
1998	21,375,000	2,250,000	3.00
1999	23,250,000	2,673,750	3.57
2000	27,375,000	3,011,250	4.02
2001	31,875,000	3,225,000	4.30
2002	34,125,000	3,375,000	4.50
2003	38,625,000	3,422,700	4.56

Exhibit 3 Selected Capital Market, Firm& Industry Data

Yield on AAA Corporate Debt	6%
Yield on 10-year U.S Treasury Bonds	5.10%
Historical average return on a broad market average of common Stock	16%
Dividend payout Ratio (average) for competitors in retail optics and repair	25%
Marginal Tax Rate for Eva Spades(recent)	30%
Coupon Rate, Eva Spades outstanding long-term debt	7.50%
Remaining term to maturity, Eva Spades outstanding long-term debt	6yrs
Dividend payout Ratio, Eva Spade (Recent)	32%
Market price per share, Eva Spade (Recent)	$18.00

1. What are the compound average annual rates of growth for Eva Spade's revenue and net income? How should the firm (eventually) analyze the value if the potential acquisition in light of these numbers?

2. What is Eva Spade's historical (book) cost of equity?

3. What is Eva Spade's historical (book) cost of long-term debt?

4. How do the firm's current liabilities influence the cost of capital calculation?

5. Using the answers for 2-4, what is Eva Spade's historical weighted-average cost of capital or WACC?